Innovation in the form of incrementally improving existing ideas, or providing a better implementation of a current idea, is still valuable to society and to investors. Google was an "also ran," as was the iPod. Both products (search and MP3 players) had been done before.
I'd say some of their examples have resulted in innovation (Heroku, Airbnb), but overall, I think most incubators seem to play it safe. I really wonder if the next Google/Facebook sized company will come through an incubator or sidestep that process altogether.